I haven't as yet downloaded the update, from all the reports on the forums there seem to be a lot of bugs. Is it as bad as all that? Should I download, or just keep pottering along with the older version?

There are bugs in both versions. Some are more annoying in the new version (selecting dwellers can be maddening at times).

Deathclaw attacks are upsetting quite a lot of people. If your dwellers don't have good gear, you might want to put off updating for that reason alone. But if you find the game not challenging enough, then go for the update.